Current SYRG Stock Info

Synergy will pursue further A&D opportunities in the DJ
Synergy Resources Corporation (ticker: SYRG) announced it has entered into a purchase-sale agreement with a private party to divest 10,000 net undeveloped acres and approximately 700 BOEPD of associated production for $71 million. The divested acres are outside of its core Wattenberg development area in Colorado's DJ Basin.

Source: SYRG December 2016 presentation

The transaction is expected to close in the first quarter of 2017, the company said in a press release.

Lynn Peter...

Analyst Commentary

From Stifel
Non-Core Divestiture
This morning, SYRG announced the divestiture of 10M net undeveloped acres for $71MM. Valuing production of 700 Boe/d at $35M/Boe/d, implies an undeveloped acreage price of ~$5M/acre (Figure 1). While below the $12M/acre SYRG paid for its Greeley Crescent assets last year, the divested properties are located outside of the Wattenberg Core where the gas/oil ratio is 1,000 or less (Figure 2).
Best in Class Balance Sheet
Following the divestiture, we project a 2017 outspend of $70MM ($140MM previously) and YE17/YE18 net debt/TTM EBITDA of 0.9x/0.8x (1.1x/1.8x previously).

From Wells Fargo
SYRG: Slight Positive. Sale proceeds add more cushion on balance sheet, litigation resolution means more completions, Fagerberg wells online, and Evans completions underway. Was some DJ basin momentum (better risk/reward matrix given valuations versus Permian) in 4Q, and SYRG participated in that but has underperformed last month. Still expect some potential hiccups re DJ midstream this summer (although DCP has addressed 2019+ issues), but bigger Street focus for Synergy is Evans Pad. Completions beginning is positive, but stock performance over next 3-6 months largely dependent on Evans Pad success.  


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